Key Takeaways:

• Inflation impacts pet owner spending, emphasizing the need for value and health benefits in products.
• Younger pet owners face economic challenges, including credit debt and student loans.
• Shift towards lower-cost pet products and services, with quality still a priority.
• Decline in dog population, influencing market dynamics.
• Continued pet industry growth expected despite challenges, with a 6% CAGR projected through 2028.

5 Key Pet Industry Trends to Watch 2024-2028 – The pet industry has seen remarkable growth over the past decade, but recent challenges have reshaped the landscape. From inflation to shifting demographics, understanding these changes is crucial for anyone involved in the pet market. In this blog post, we’ll explore five key trends that will shape the US pet industry from 2024 to 2028, based on insights from industry experts and data-packed analyses.

1. Impact of Inflation on Pet Owner Spending:
Inflation has been a significant factor affecting pet owner spending in recent years. As David Lummis noted, much of the growth in the pet market over the past few years has been inflation-related. This trend is evident across various pet market categories, with inflation rates doubling or even tripling compared to previous years.

In Packaged Facts’ January 2024 Survey of Pet Owners, 31% of respondents reported that their ability to buy non-essentials had been negatively impacted by the economic environment, and an equal percentage said their ability to pay monthly bills was affected. This highlights the financial strain on pet owners, pushing them to seek better value and health benefits in products.

The emphasis on premium products has intensified as consumers look for good value amidst rising costs. Pet marketers will need to highlight the health benefits and quality of their products to convince pet owners to spend more despite economic pressures. This means providing clear information on how these products improve pet health and longevity, which can justify the higher price points.

2. Economic Challenges Facing Younger Pet Owners:
Younger generations are essential for sustaining the pet market as baby boomers age and exit pet ownership. However, they face significant economic barriers. Younger pet owners are more likely to have credit card debt, live paycheck to paycheck, and use buy-now-pay-later options. The return of student loan payments further strains their finances, with about 15% of millennial pet owners grappling with these debts.

Housing patterns also play a role, with dog ownership strongly correlated to homeownership. As housing becomes more out of reach for younger buyers due to high mortgage rates and a shortage of housing stock, fewer households are adopting dogs, impacting the overall pet market.

The economic environment for younger pet owners means that pet brands need to be strategic in their approach. Offering flexible payment plans, loyalty programs, and budget-friendly product lines can help attract and retain these consumers. Additionally, brands could partner with financial services to provide pet owners with better financing options for pet-related expenses.

3. Shift to Lower-Cost Pet Products and Services:
Amid economic pressures, pet owners are seeking ways to economize without compromising quality. According to Packaged Facts’ survey, 71% of pet owners prioritize product quality, while 61% look for good value. Only 36% consider low prices as a deciding factor.

This shift is evident in the increased use of private label products and lower-priced brands in pet food. In 2024, 32% of dog owners and 28% of cat owners who switched pet foods opted for cheaper alternatives. This trend opens significant opportunities for private label products, which are still underutilized in the US compared to Western Europe.

Pet services, however, present a mixed outlook. While boarding and daycare services have rebounded since the pandemic, more discretionary areas such as grooming and training have yet to fully recover. Veterinary services have also seen a downturn, disproportionately affecting lower-income households.

One bright spot is the growth of pet insurance and veterinary expense plans, which cater to mid-range and lower-income households that need more help paying vet bills. Pet insurance has increased its customer base by 29% from 2021 to 2023, indicating a growing awareness and acceptance of these financial safety nets.

4. Decline in the Dog Population:
The US pet market has traditionally been dog-centric, but this is changing. From 2019 to 2023, the number of dog-owning households fell by 5%, from 52.5 million to 49.9 million. This decline spans all generational cohorts, from millennials to older seniors. While cat ownership has increased, it only partially offsets the decline in dog ownership.

This shift requires pet marketers to adjust their strategies, as the market can no longer rely solely on dog owners for growth. Diversifying product offerings and targeting cat owners and other pet categories will be crucial.

Adapting to this change means exploring new product lines that cater to different pet types. For example, products specifically designed for cats, small mammals, and exotic pets could see increased demand. Marketing strategies should also highlight the unique needs and benefits of caring for various types of pets, which can help attract a broader audience.

5. Continued Pet Industry Growth Amid Challenges: Despite these challenges, the pet industry is poised for continued growth. Packaged Facts predicts a 5% growth in the US pet market in 2024, with a compound annual growth rate (CAGR) of 6% through 2028. This growth is impressive compared to other mature consumer markets.

David Sprinkle emphasizes that while the current growth may seem modest compared to pre-pandemic levels, it’s still strong by any consumer market standard. The pet market’s resilience and adaptability will drive its future success.

The future of the pet industry looks promising, but staying competitive will require innovation and responsiveness to market changes. Companies that can adapt to consumer needs and economic conditions will thrive. Investing in research and development to create new, innovative products will be key to maintaining growth and customer loyalty.

Practical Tips:

1. Focus on Value: Emphasize the health benefits and quality of your products to attract cost-conscious pet owners.
2. Target Younger Consumers: Develop strategies to engage younger pet owners facing economic challenges.
3. Diversify Offerings: Expand product lines to include lower-cost options and cater to different pet categories.
4. Leverage Private Labels: Explore private label opportunities to meet the demand for affordable yet quality products.
5. Adapt to Changing Demographics: Stay ahead of trends by understanding the shifting demographics in pet ownership.

The pet industry is navigating a complex landscape, but opportunities abound for those who stay informed and adaptable. By understanding these key trends, you can better position your business for success in the coming years. Don’t miss out on the latest insights and strategies—subscribe to our newsletter today!

We’d love to hear your thoughts! What trends do you think will shape the pet industry in the next few years? Leave your comments and feedback below.